{"id":1001,"date":"2022-02-02T17:59:00","date_gmt":"2022-02-02T15:59:00","guid":{"rendered":"https:\/\/arc.dev\/employer-blog\/?p=1001"},"modified":"2025-06-11T13:09:58","modified_gmt":"2025-06-11T05:09:58","slug":"taxes-when-hiring-a-freelancer","status":"publish","type":"post","link":"https:\/\/arc.dev\/employer-blog\/taxes-when-hiring-a-freelancer\/","title":{"rendered":"How to Do Taxes When Hiring a Freelancer"},"content":{"rendered":"\n

Note<\/strong>: If you’re on the other side of the client-freelancer relationship, here’s how to file your taxes as a freelance developer<\/a>.<\/em><\/p>\n\n\n\n

As Benjamin Franklin once said, \u201cNothing in this world can be certain, except death and taxes.\u201d Taxes are an inevitable part of doing business, whether you\u2019re a sole proprietor or head of a large corporation. At the end of the day, the government gets its due.<\/p>\n\n\n\n

If you\u2019re in a traditional employer-employee relationship, how to file taxes is pretty clear-cut. But, as a client of a freelance developer, it might not be as easy as simply filing a W-2<\/a> and calling it a day.<\/p>\n\n\n\n

In this post, we\u2019ll go through how US-based employers can file taxes on engagements that involve freelance software development services. We’ll discuss the different tax forms, what form to file, deadlines, income thresholds, and what\u2019s needed from the freelancer to file taxes on their behalf.<\/p>\n\n\n\n

Read on to have your freelance tax filing questions answered!<\/p>\n\n\n\n

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How to File Taxes When Hiring a Freelancer<\/h2>\n\n\n\n

Below are some frequently asked questions about how US-based clients handle taxes when hiring both US-based and non-US-based freelance developers, as well as detailed explanations for answers.<\/p>\n\n\n\n

Do I have to file anything on behalf of my freelance developer?<\/h3>\n\n\n\n

If you\u2019ve employed a freelance developer and paid them over $600, you need to file a 1099-MISC<\/strong> on their behalf. If your freelance developer does not have a green card, is not a US citizen, or is not a resident alien, you need to have them fill out a W-8BEN<\/strong> to limit your tax liabilities. <\/p>\n\n\n\n

If you work with a freelance developer platform, they’ll often take care of 1099-MISCs and W-8BENs for you, so you don\u2019t have to file anything.<\/p>\n\n\n\n

What is a 1099-MISC?<\/h3>\n\n\n\n

A 1099-MISC<\/a> is used to report miscellaneous, or non-employee income, to the IRS. It\u2019s typically used to report income earned by an independent contractor that is\u00a0not an employee<\/strong>.<\/p>\n\n\n\n

A 1099-MISC is different from a W-2<\/a> because it does not include federal\/state withholdings or Social Security and Medicare taxes (because the independent contractor is responsible for paying those themselves). A 1099-MISC form has 5 parts:<\/p>\n\n\n\n